Weekend Brief: Patagonia shows a new way to do business

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The big news in fashion last week was Patagonia’s never-before-seen new structure. The company is now fully committed to fighting climate change with every cent it makes. Elsewhere, Kanye West has officially begun legal proceedings to terminate his contract with Gap, and the Barneys New York name has been licensed for a new Korean beauty and wellness line. Don’t forget to subscribe to the Glitter Podcast every Wednesday and Friday episodes, and the Glitter Beauty Podcast every Thursday episodes. –Danny Paris, c. Fashion reporter

Patagonia tries to change the world.
Patagonia made headlines last week with a new business move. Founder and owner Yvon Chouinard has placed 98% of the company’s ownership in a joint non-profit trust that ensures it operates solely for the benefit of society. Patagonia focuses on fighting climate change through political advocacy and using profits for research and the development of environmental practices.

For now, nothing will change, how the company is run. CEO Ryan Geller will remain in charge and Patagonia will remain a profitable business. The difference is that instead of those profits being issued for shares or used for executive bonuses, they are reinvested back into the company or to fight climate change, which is common for other large companies.

The Chouinard family has been planning for two years how to use this year’s projected $100 million in company profits to help the planet. Chouinard, in an open letter written on Patagonia’s website, said that the biggest concern is to ensure that the future owners of the business cannot abandon its environmental goals.

“Even well-intentioned public companies are under tremendous pressure to create short-term profits at the expense of long-term survival and responsibility,” Chouinard wrote.

Many in the climate advocacy space argue that capitalism’s profit-seeking goals — seeking quick returns and growth at the expense of long-term sustainability — are incompatible with the actions needed to prevent further climate change. Chouinard’s strategy seeks to avoid that problem by having Patagonia work toward a legally mandated goal.

Patagonia has always been known in the corporate world as an outlier for its sometimes anti-consumer approach to operations. Hopefully, more companies will follow suit in the future.

You and space quarrel
The ongoing feud between Kanye West and his brand partners came to a head last week, when West, who goes by Ye, announced his formal desire to sever ties with Gap.

The Associated Press, which first reported the effort, spoke to Ye’s attorney, Nicholas Gravante. According to Gravante, his argument is that Gap promised to open Yeezy-specific stores in the contract. Gap did not do this, so the contract is void.

Late Thursday, Gap said in an internal memo to employees that it would agree to end the partnership, ending what had been a 10-year deal.

“[W]With Yeezy Gap, we share a vision of bringing unique omni-experiences to everyone through high-quality, trend-forward, utilitarian design, and how we work to deliver this vision, said Gap Brand CEO Marc Breitbard. Employees in the note. “And we decided to end the partnership.”

Gap hoped the line would generate $1 billion a year by 2025. This week on Glossy, we’ll have more analysis of how the split affects Ye and Gap.

Barneys New York is back as a beauty brand
In the year Barneys New York, which went bankrupt in 2019 and was bought by True Brands Group, is only available as a licensed name for other brands. For example, Saks Fifth Avenue granted rights from ABG to use the name Barneys New York for shop-in-shops within Saks Fifth Avenue Stores.

Now the name has been licensed again, this time to Korean company Glont Group. Glont is launching a line of beauty and health products under the Barneys New York Beauty label. Barneys New York Beauty starts with a cleanser, serum and two creams priced from $48-$168. Additional products such as hand care, lip balm and body wash are expected to launch later this year.

The first big test is whether the Barneys New York name can sell products outside the department store. If successful, ABG may be tempted to see what products the Barneys name can tap into to capitalize on its pedigree.

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